China's GDP growth may slide to 7.8% in Q2

Updated: 2012-06-05 20:35

By Li Jiabao (chinadaily.com.cn)

Economists think China's GDP growth in the second quarter could slow to 7.8 percent after a cooled expansion of 8.1 percent in the first quarter, according to survey findings released on Tuesday.

Ten financial institutions participated the survey initiated by Caixin and reported expectations of a median 7.8 percent growth in China's GDP in the second quarter. Only two of the 10 participants kept a GDP growth prediction in the second quarter above 8 percent, with the highest expectation of 8.2 percent.

"The export slowdown and the cooled domestic investment were jointly responsible for the weak GDP expansion in the first half of the year," said Lian Ping, chief economist at the Bank of Communications.

“The European debt crisis is still spreading, which keeps dampening China's overseas demand. Domestic investments in real estate decreased significantly while investments in manufacturing slowed owing to the sluggish global economy and cooled property investment at home,” he said.

Analysts at Goldman Sachs Gao Hua Securities Co Ltd lowered estimates of China's GDP growth in the second quarter from 8.5 percent to 7.9 percent while maintaining that China's macroeconomic policies will further ease. Increased investments in infrastructure, bank loans and fiscal expenditure in the second half of this year will speed up the economic growth.

The survey also predicted acceleration in exports and imports in May. It expected exports to increase by 7.4 percent year-on-year in May while imports would expand by 4.6 percent. China's export rose by 4.9 percent year-on-year in April and imports slightly expanded, by 0.3 percent.